Warriors' S.F. arena costs piling up

Fixing piers now thought to cost up to $170 million

Updated 8:47 pm, Monday, October 28, 2013

If spending a lot of dough and outsmarting a determined defense is what it takes to get the team a new arena on the San Francisco waterfront, the Golden State Warriors owners say they are game.

The cost to rehabilitate the aging piers where the arena would perch - as much as $170 million -"is a lot higher than we originally started with," co-owner Joe Lacob said at a San Francisco Chamber of Commerce luncheon Monday to kick off the team's NBA season and promote the proposed $1 billion arena project.

"It's a big number," Lacob said. "But look, we're privately doing this, and we've made the decision we're going to do it. It's more expensive than we thought, but you only live once."

Lacob's ownership partner, entertainment mogul and part owner of the Los Angeles Dodgers, Peter Guber, said that determination extends to navigating San Francisco's fractious politics.

"Doing anything this large, you have to get a lot of constituencies to all coalesce at the same time," Guber told the audience of more than 300. "What we're doing is like trying to get 12 Bulgarian jugglers, and get 12 Bulgarian jugglers to juggle perfectly. It's pretty hard."

The team is facing a shrinking and aggressive time frame to get its arena project approved and built in time for the 2017-18 NBA season, when its lease at Oracle Arena in Oakland runs out.

Opponents of the proposed location at Piers 30-32, two conjoined city-owned piers just south of the Bay Bridge, say the proposed 125-foot-high venue, which is expected to draw 2 million people a year to games, concerts and other events, will obstruct views and create a traffic and transit nightmare.

The project includes an 18,000-seat arena, two parking garages, a hotel, two condominium towers and retail space spread across the 13-acre pier and a 2.3-acre site just across the Embarcadero that is now used as a parking lot.

A leading opponent of the project, former Mayor Art Agnos, acknowledged that the team has plenty of money, but also wondered if there is a limit to what the owners are willing to spend.

"Money is no object for (Lacob) as a billionaire owner," Agnos said. "Still, I don't see how you can be undeterred if you don't know what the price is. ... At some point, when they get a price, it may be too expensive."

The team, which Lacob and Guber bought for $450 million in November 2010, was valued at about $800 million in August, according to ESPN, which cited a confidential source.

A year ago, the Warriors projected the cost of repairing the piers at $100 million. A Port of San Francisco memo indicated that figure had risen to $130 million as of July and could reach $170 million. While the team might not ultimately pay that much, it's got to get a deal nailed down with the city before it can move forward.

The framework of a deal outlined a year ago calls for the city to reimburse the team up to $120 million for rebuilding the pier, which the city would continue to own and lease to the team for 66 years.

The repayment would come from revenue linked to the development, including lease payments, the sale of property across the Embarcadero to the team for about $30 million and a portion of tax revenue generated by the project.

Mayor Ed Lee, who has called the arena his "legacy project," Monday was confident the city's financial exposure would not increase.

"I don't think the city can chip in more," Lee said. "I think the numbers are what they are. They rose the last six months. ... We want to support (the Warriors), but we also have limitations on the city. And they know."

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